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Will Higher Selling Prices Drive Nucor's (NUE) Q3 Earnings?

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Nucor Corporation NUE is scheduled to come up with third-quarter 2021 results ahead of the bell on Oct 21. Higher domestic steel prices driven by an upswing in demand and supply constraints are likely to have supported the steel giant’s sales and margins in the third quarter. The benefits of higher plate and sheet sales prices are expected to reflect on the performance of its steel mills business.

Higher Prices to Boost Profitability

Profitability across Nucor’s steel mills and steel products segments is expected to have boosted by higher average sales prices in the September quarter. In the steel mills unit, sheet and plate are likely to have witnessed an increase in sales prices in the third quarter, driving results for these product groups.

The Zacks Consensus Estimate for third-quarter average sales price per ton for the company’s steel mills unit stands at $1,328, suggesting a 107.8% year-over-year increase. The same for plate products is pinned at $1,433, reflecting a year-over-year rise of 114.8%. The Zacks Consensus Estimate for sheet products stands at $1,523, which reflects a year-over-year increase of around 156%.

Moreover, the consensus estimate for average sales price per ton for the company’s steel products unit is pegged at $1,857, suggesting a year-over-year rise of 35.4%.

U.S. steel prices have witnessed an unprecedented surge this year driven by strong underlying supply and demand fundamentals. The benchmark hot-rolled coil (“HRC”) prices witnessed a significant upswing during the September quarter riding on solid demand in key end-markets such as automotive and construction and supply shortages. HRC prices broke above $1,900 per short ton in August 2021 and remained above that level through September. The effects of the price surge are likely to get reflected on Nucor’s top and bottom lines in the third quarter.

Nucor Corporation Price and EPS Surprise

Nucor Corporation Price and EPS Surprise
Nucor Corporation Price and EPS Surprise

Nucor Corporation price-eps-surprise | Nucor Corporation Quote

Overall Expectations

The Zacks Consensus Estimate for third-quarter consolidated revenues for Nucor is currently pegged at $10,098 million, reflecting a year-over-year increase of 104.9%. The consensus estimate for earnings is $7.48, which indicates a substantial rise from the prior-year reported number.

Zacks Model

Our proven model does not conclusively predict an earnings beat for Nucor this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.

Earnings ESP: Earnings ESP for Nucor is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Nucor currently carries a Zacks Rank #1.

Stocks That Warrant a Look

Here are some companies in the basic materials space you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:

Olin Corporation OLN, scheduled to release earnings on Oct 21, has an Earnings ESP of +6.95% and carries a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Nutrien Ltd. NTR, scheduled to release earnings on Nov 1, has an Earnings ESP of +0.77% and carries a Zacks Rank #1.

The Chemours Company CC, scheduled to release earnings on Nov 4, has an Earnings ESP of +5.70% and carries a Zacks Rank #2.


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Nucor Corporation (NUE) : Free Stock Analysis Report

Olin Corporation (OLN) : Free Stock Analysis Report

The Chemours Company (CC) : Free Stock Analysis Report

Nutrien Ltd. (NTR) : Free Stock Analysis Report

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